Adam Linker and Aldona Wos - Two views on McCrory Medicaid initiative

Sunday

Apr 14, 2013 at 2:49 AM

One, a policy analyst, disagrees with privatization approach; the other, a state department secretary, looks to help turn a vision into reality.

Gov. Pat McCrory campaigned as a moderate bent on buffing North Carolina's brand. Well-publicized political scandals and a high unemployment rate, he argued, had tarnished our state's national standing. Voters agreed and sent McCrory to Raleigh to restore our good reputation.That is not what he has done in the first quarter of his inaugural year in office. Instead of building on the state's success and repairing what is wrong, McCrory is dismantling large parts of state government and putting these public functions under the control of private companies. He is not rebranding North Carolina; he's remaking it.McCrory's moves thus far put him in questionable company. Even tea-party-backed governors in states such as Florida, Arizona and Ohio are championing Medicaid expansion in their states. Not McCrory. Our governor signed legislation turning back federal funds that would have provided health insurance coverage to our most vulnerable citizens. This harms not only individuals and families; it impacts hospitals and health care providers. And allowing ideology to trump good policy diminishes our brand as a moderate Southern state. Extremism is bad for business.All of this set the stage for the governor's announcement on April 3 that his administration will work to privatize our Medicaid system.McCrory has not released a detailed plan but he did outline his proposal at a press conference. North Carolina will contract with several Medicaid managed care companies, and perhaps a public or nonprofit entity, to enroll low-income patients and oversee all of their care. The companies will get a flat fee per plan enrollee based on the level of attention the patient requires.This initiative will save money because the private companies will get a set budget from the state. The insurers will then use the magic of the free market to cut expenses, provide superb care, and still turn a tidy profit. That's the theory. This is never how it works in reality.We have seen this exact plan play out in a number of states. Most recently, Kansas and Kentucky have implemented this proposal. In Kansas, the rollout is too recent to judge, although some early problems are emerging. In Kentucky, there is chaos. The state auditor there began a probe when he heard reports that small medical providers needed new lines of credit to stay open. In the first several months of implementation, the auditor discovered, managed-care companies received $708 million from the state and paid out just $420 million in claims. The auditor in Kentucky announced that he would form a new unit dedicated to investigating the Medicaid managed care companies. He also released a series of scathing recommendations, including one that mental health services be removed from managed care. Legislators in that state want to give the Department of Insurance authority to directly regulate the Medicaid companies.These results are tragic but predictable. The truth is that managed care companies don't have any secret sauce to saving money. To keep their executives and shareholders well- compensated, these corporations delay payments to providers and deny care to patients.What is especially disturbing about McCrory's proposal to dismantle our Medicaid program is that our state serves as a national model. Community Care of North Carolina, or CCNC, is a nonprofit network that primarily serves Medicaid patients and works with providers to reduce costs by implementing best practices. Thanks in part to the expansion of CCNC, North Carolina's Medicaid system had the lowest spending growth in the nation over the past three years.After McCrory held his press conference, the N.C. Medical Society released a statement that read, in part: “We have a homegrown, nonprofit, national-award-winning program in CCNC that addresses problems the governor identified and has produced hundreds of millions of dollars in taxpayer savings through coordinating health care. We question the wisdom of handing this important function off to Wall Street.” Indeed.North Carolina has traveled this path before. When the state identified problems in the public mental health system, politicians dismantled that network and privatized services. That process proved disastrous.If we repeat that mistake across Medicaid, it will hurt patients and wreck our brand as a national leader in health care.

Adam Linker is a policy analyst with the N.C. Justice Center, a Raleigh-based nonprofit and liberal advocacy group that works statewide to alleviate poverty.

The “Partnership for a Healthy North Carolina” that Gov. Pat McCrory and I announced this month is a bold framework to improve mental and physical health care and outcomes for North Carolina's most vulnerable citizens. This framework was based on significant input we received from health care providers, recipients and advocates, but the real work of building a sustainable future for the state's Medicaid program is just beginning. To turn this vision into reality, we must continue to engage with the public and private sectors and seek creative and innovative ideas as we finalize the details of the plan. We began this reform process by putting out a call for ideas and suggestions and we received more than 160 responses. The responses shared many common concerns, including a disjointed IT system and too much administrative duplication. But there was also agreement that our Medicaid system did not look at a person as a whole, separating physical health and mental health and even substance abuse into different silos of care that didn't collaborate to improve patient outcomes. In our current system it is often difficult for Medicaid recipients to know where to go to get the services they need.We used those responses to develop our framework, which will create a comprehensive system to coordinate a network of care around the whole person. The central piece of the “Partnership for a Healthy North Carolina” is the formation of approximately three “comprehensive care entities.” These entities will be responsible for coordinating physical and behavioral health care for all Medicaid recipients. They will build or partner with existing providers or networks to ensure each individual will receive the right care at the right place and at the right time based upon their needs.A common question about the plan – especially among the North Carolina provider community – has been, “Why do we need yet another plan to fix the Medicaid system here in North Carolina?” Admittedly, our state is nationally recognized for innovations and accomplishments in community-based care. That is why our goal for this reform is to build on – not undo – those gains and take them to the next level.Our plan also takes into account important lessons learned, good and bad, from managed and community care reform in other states. As a physician, I lived through a difficult implementation of a system of managed care in New York during the 1980s. In fact, it was so “well-managed” that it managed many physicians right out of business! With our plan, we want to make North Carolina the best place to practice medicine in the country.In the past, our state used a piecemeal approach to reform, but cutting services for short-term savings only yields short-term results. This effort is not a budget exercise. This effort is bold action to ensure our costs are more predictable and sustainable in the long term.Now, the work of making this plan a reality begins. We are continuing to invite everyone to join us in this exciting effort to create a Medicaid system that cares for the whole person. Our state Medicaid director and I are holding “office hours” for anyone who would like to find out more and provide feedback and contribute to this process. We have even launched a web page at www.ncdhhs.gov/medicaidreform where we'll be posting updates on our progress in developing a plan and providing a place for the public to ask and get answers to their questions.For the first time, we have a comprehensive vision for a sustainable Medicaid system in North Carolina. We know this change may be difficult for some, but I firmly believe that this partnership can build a sustainable Medicaid system that creates a healthier North Carolina if we work together to make this vision a reality.

Aldona Wos, M.D., is secretary of the N.C. Department of Health and Human Services.

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